Reality bites for cable powerhouse

After two years, Discovery shifts strategy under new topper Campbell

Discovery Networks has decided to rediscover its roots.

In 20 years, the cabler grew from a single channel to a multibillion-dollar global enterprise, which includes 16 networks — owned by Liberty Media, Advance/Newhouse and Cox — in the U.S. alone.

With flagship nets Discovery Channel, TLC and Animal Planet, the purveyor of nature docs and lifestyle series was consistently entrenched among cable’s top 10 and was the clear nonfiction leader.

But thanks to rivals like A&E, Court TV, VH1, E! and Bravo, which offer fare much more salacious than Discovery’s clean and respectable offerings, ratings have been in a two-year slump; the once-hot TLC is sliding toward No. 25 in overall viewers.

Discovery Networks generated $2.4 billion in revenue last year — but most of that growth came from the company’s high-definition TV efforts. Add in weak ad sales and an exec exodus and it’s no wonder that Wall Street isn’t looking kindly on the cable group, now part of publicly traded Discovery Holdings.

All of which has prompted a strategy shift. Discovery Networks prexy Billy Campbell, whose reorganization of the cable group has yet to pay off in Nielsens, is dealing with the heat.

Campbell recruited general managers for Discovery, TLC, Animal Planet and Travel Channel — some of whom are experiencing their first taste running a U.S. cable network.

Travel’s Patrick Younge was a sports man at the BBC and TLC’s David Abraham ran the U.K.-based Discovery operation. Both are working to put their own slates in production for next year.

Discovery Channel’s Jane Root, a former BBC2 exec known for having put “The Office” on the air in the U.K., has yet to mine a breakthrough series after more than a year. However, she’s one for two on event programming. Though “Greatest American” bombed over the summer, “The Flight That Fought Back” gave Discovery its third-highest rating in history.

Campbell, a Southern gent who cut his chops working for Leslie Moonves with high-profile positions at Warner Bros. TV and CBS, was brought in by Discovery Communications prexy-chief operating officer Judith McHale in 2002 to spice up the programming for all the Stateside nets.

He arrived right before the Discovery Channel and TLC hit ratings crescendos with testosterone docudramas “Monster Garage,” “American Chopper” and home makeover “Trading Spaces,” respectively.

But with those shows getting long in the tooth, Campbell says he’s going back to Discovery’s roots. Despite today’s competitive climate, exec says, slow-to-build shows are going to be part of the formula. Gone is an over reliance on single genres like the home makeover shows on TLC. And going forward, programs across the entire Discovery branded channels will zero in on that element of learning that marked the nature-oriented docs that used to be the group’s dominant biz.

“We’ve gotten back to the core,” Campbell says. “We’re refocused and I feel very confident in our shows going forward. I fight every day to defend the brand.”

Some critics carp that all these U.K. connections — including a major partnership between Discovery and the BBC inked several years ago — may be clouding the programming strategies.

The American cable market has different measures of success from a European public service. Is the Brit outlook coloring the Discovery plan?

Campbell says no and there’s certainly no English accent to the ambitious new slate of programs rolled out by Discovery and TLC. But, so far, the results are mixed.

Spring’s “Deadliest Catch” pulled in boffo numbers, summer’s “Dirty Jobs” continues to do well and the Oct. 22 bow of “Roush Racing” delivered an OK 922,000 viewers.

But fall’s other major premieres have been underwhelming. “Beyond Boundaries” premiered Oct. 12 to a disastrous 295,000 viewers — 70% below the year-to-date primetime average. “SOS: Coast Guard Rescue” and “Firehouse USA” drew so-so results.

Over at TLC, now distancing itself from the HGTV aud, “Ballroom Bootcamp” and “Tuckerville” popped a nice numbers, but bows for “The Adam Carolla Project,” “Dead Tenants” and “Psychic Investigators” yielded disappointing numbers.

Campbell maintains a positive outlook.

“It’s always hard to have anything break out. Look at the broadcasters with no new hits this season,” he says.

He also wants to get more competitive in the reality game. He hired former E! programmer Mark Sonnenberg to head up entertainment out of the West Coast and liaise with the general managers in Silver Springs, Md.

Insiders say that, in addition to the newly centralized production unit, Sonnenberg’s hiring has the g.m.’s grumbling about how much decision-making will actually be left to them. Campbell says: “The creative buck stops with the general managers.”

Whatever the case, producers say the changes are necessary.

“Discovery is getting much more in synch with the development and programming zeitgeist of Los Angeles and New York, says Michael Branton, head of programming for reality producer GRB Entertainment.

“They’re being much more competitive and meeting the challenges of the marketplace head-on.”

But that doesn’t mean they’re up for any old reality show. GRB’s “Tuckerville,” a docusoap about the attempted comeback of a country singer, could easily have gone in a cheap direction, Branton says, but TLC didn’t want that. “They’re not going for lowest common denominator.”

On the other hand, Campbell passed on several projects that have flourished elsewhere.

“We looked at (A&E shows) ‘Dog the Bounty Hunter’ and ‘Criss Angel: Mindfreak’ and passed, even though I was certain they’d get a rating,” Campbell says. “For Discovery, it’s about investment.”

To be fair, industry execs agree “American Chopper” and “Trading Spaces” are tough acts to follow for any show.

Media buyers who have stuck with the channel in spite of a two-year ratings decline say they do it because while other cablers have tossed their brands, the name Discovery still means something to the consumer.

“When you say ‘Discovery Networks’ to a client, they instantly get it,” says Starcom senior VP-director of entertainment Laura Caraccioli-Davis. “They don’t have any big shows and still, you haven’t really seen a big backlash from the ad community.”

Also, Caraccioli-Davis says, folks in the ad community love Discovery sales chief Joe Abruzzese, whom Campbell poached from CBS. Abruzzese’s biggest accomplishment might simply be holding the line: Advertising for Discovery Networks is flat for the year, and financial analysts predict the trend will continue through 2006.

Says Campbell: “We’ll always fight for ratings, but the neat thing about the Discovery Networks is that quality will always come first.”

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